Mr Simon Burns: I am grateful to my hon. Friend the Member for Cornwall—I mean the hon. Member for St Ives (Andrew George)—for moving the new clauses and amendment, especially for the constructive and reasonable way in which he did so. He raised several issues and, if I understand him correctly, he sees the amendment as a probing amendment that also puts across several of his concerns about this issue. I hope to deal with the main thrust of his concern in my contribution.
I am also grateful to the hon. Member for Islington South and Finsbury (Emily Thornberry) for her contribution. Her amendment and indeed her comments were more controversial and I have far more disagreement with several of the contentious things that she said, although she will be unaware that I am saying that because she is not listening. She might argue that she is not missing much.
I shall start with a fact. It may have got lost in the telling, but I assume that the hon. Lady realises that there is no cap at the moment for NHS trusts. There is only a cap for foundation trusts. She has not seen the difficulties that she forecasts in NHS trusts, and I hope—although I am not confident of success—that I will convince her that her fears are unfounded.
The Government believe that keeping the cap would damage the NHS and patients’ interests. Removing it would allow foundation trusts to earn more income to improve NHS services, and I will address the safeguards that will be in place to ensure that the armageddon that the hon. Lady predicted will not happen and that my hon. Friend’s concerns are needless.
[ Interruption. ] Before the Opposition Whip says anything, I should point out that the right hon. Gentleman takes that as a compliment. I am being very nice to him and probably enhancing his street cred. He would not thank the Whip for diminishing that.
Removing the cap will enable foundation trusts to earn more money to improve NHS services, and those trusts are telling us that they must be freed from what is an unfair, arbitrary, unnecessary and blunt legal instrument. I do not want to go too far down memory lane, but I must remind the House that there was no intellectual case for bringing in the cap in the first place. It was introduced in 2002-03 in the relevant legislation as a sop to old Labour. The right hon. Member for Holborn and St Pancras (Frank Dobson) says that he has moved on, but he still has the Neanderthal tendencies of old Labour—
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The point is that the cap was not brought in after some coherent intellectual argument about protecting the NHS or preventing private patients from overrunning the NHS. It was brought in because the then Health Secretary, Alan Milburn, and the then Prime Minister, Tony Blair, were having considerable problems with some of their Back Benchers on this issue. To avoid a defeat on the Floor of the House, they brought in the cap as a sop to those Back Benchers to buy them off. But it was not introduced consistently for both NHS trusts and foundation trusts—just for the latter.
The cap is arbitrary and unfair. Several NHS trusts that are not subject to the private patient income cap have private incomes well in excess of many foundation trusts. Last year, four of the top 10 private income earners were NHS trusts—that is, without a cap. A few FTs have high private incomes simply because they did a few years ago. The cap locks FTs into keeping private income below 2002-03 levels and means that last year about 75% of FTs were severely restricted by caps of 1.5% or less. Meanwhile, patients at the Royal Marsden benefit from its cap being 31%, and it has consistently been rated as higher performing by the Care Quality Commission.
Andrew George: The Minister is making an interesting point. Will he elaborate further on the proportions of the private work to which he refers? Is that private work for private patients or private work for research, innovation and training, which are important functions of hospitals but are often lost in the debate?
Mr Burns: The hon. Gentleman raises an important point, but the simplistic answer is that it is a combination of both.
The cap is unnecessary. I remind Opposition Members that the original proposal was not to have one. To suggest that NHS patients would be disadvantaged if the cap was removed, as the hon. Member for Islington South and Finsbury did, is pure and simple scaremongering. Existing and new safeguards will protect them. NHS commissioners will remain responsible for securing timely and high-quality care for NHS patients. The Bill will make FTs more accountable and transparent to their public and staff, allowing us to require separate accounts for NHS and private income and giving communities and governors greater powers to hold FTs to account in performing their main duty, which is to care for NHS patients.
Chris Leslie: Will the Minister give way?
Mr Burns: No, because others want to speak.
I can assure the House that FTs will retain their principal legal purpose—to serve the NHS. This means that the majority of their income will continue to come from the NHS. With no shareholders, any profit they make will have to be ploughed back into the FT, and so will support that purpose of caring for NHS patients. The vast majority of FTs have little, if any, potential to increase private income, never mind the desire to do so. For them, NHS activity will remain the overwhelming majority of the work they do, if not all of their work. It is extremely unlikely that even the most entrepreneurial FTs with international reputations would seek to test the boundaries. Their commissioners, public and NHS staff governors would hold them to account in fulfilling their duties and serving their NHS patients.
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For these FTs, however, the cap is a blunt instrument that harms NHS patients. FTs tell us that there is potential to bring extra non-NHS income into the NHS, for example, by developing the NHS’s intellectual property, from innovations such as joint ventures and by using NHS knowledge abroad. Additional demand and income can help organisations to bring in leading-edge technology faster, including in the important area of cancer treatment. I hope that that goes some way to helping my hon. Friend the Member for St Ives. Opposition amendment 1165 would harm the NHS, and new clauses 19 and 22 would stop FTs providing private health care altogether. Many of the other protections proposed would be almost as damaging and reduce income.
We want to ensure that safeguards are appropriate, not harmful. For example, a prohibition on FTs offering privately the same services that they offer on the NHS would rule out most of their current private health care. It could even create perverse incentives to stop providing some services for some NHS patients. We are confident that private income benefits NHS patients. On reflection, we are proposing to explore whether and how to amend the Bill to ensure that FTs explain how their non-NHS income is benefiting NHS patients. We will also ensure that governors of FTs can hold boards to account for how they meet their purpose and use that income. I believe that that is an important move forward.
Simon Hughes (Bermondsey and Old Southwark) (LD): Will the Minister give way?
Mr Burns: I hope that the right hon. Gentleman will forgive me, but I will not give way, because other hon. Members wish to speak and the debate finishes in 20 minutes.
To my mind, the private patient cap and the proposed new restrictions are both unnecessary and damaging. Indeed, I know that this will drive some Opposition Members potty, but the former Labour Minister responsible for the cap, Lord Warner, repented his sins in the other place, describing it as
“wrong and detrimental to the NHS.”—[Official Report, House of Lords, 12 May 2009; Vol. 710, c. 936.]
I urge Opposition Members not to repeat that mistake and to heed Lord Warner’s advice. I appreciate that the Opposition Benches are not full of champions of Lord Warner—particularly not at that end of the Chamber from which we heard the earlier comments about him—but he is a respected former Labour Health Minister and I would suggest that he knows what he is talking about.
Let me deal briefly with two final points that were made by the hon. Members for Islington South and Finsbury and for St Ives about the safeguards that are in place to offer protection and ensure that NHS patients would not lose out with the removal of the cap. First, the NHS commissioning board and clinical commissioning groups would be responsible for ensuring that NHS patients are offered prompt and high-quality care, and that good use is made of NHS resources, whoever provides care, through robust contracting arrangements. NHS patients will also maintain their right in the NHS constitution to start treatment within 18 weeks of referral. Secondly, as foundation trusts do not have shareholders and cannot distribute surpluses externally, and as their
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principal legal purpose will remain to serve the NHS, all proceeds from non-NHS work would be reinvested in the organisation, ultimately adding to the level and quality of the NHS service.
The Bill will make FTs more accountable and transparent to their public and NHS staff. Our commitment that FTs will produce separate accounts for their NHS and NHS private-funded services—as well as Monitor’s use of its regulatory powers to ensure a level playing field between providers—will also help to avoid any risk of NHS resources cross-subsidising private care, thereby protecting NHS money. I believe that those five safeguards will protect NHS patients and the NHS, and will not lead to the situation that the hon. Member for Islington South and Finsbury described in her speech.
Emily Thornberry: I do not mean in any way to suggest that the right hon. Gentleman does not believe what he has just said, but what if he is wrong? It is all very well for him to say, “We’re going to lift the private patient cap—we have these safeguards and I believe they’re sufficient to ensure that NHS patients won’t suffer,” and he may be right. However, the difficulty is that he may be wrong, so why are we taking this risk at a time like this? What is the point? What is the benefit?
Mr Burns: I do not think that this will come as a surprise to the hon. Lady, but I do not think that I am wrong, and I say that for the following reasons. First, there has never been a cap on NHS trusts, and the problems that she has speculated about during this debate have never occurred where there is not a cap. Secondly, the reasons that I have outlined would suggest to me that there will not be a problem, particularly as the one hospital that I singled out—the Royal Marsden—has an income cap of 30.7%. Nobody is suggesting that NHS patients are suffering as a result of that, and that is where a substantial income comes from non-NHS work. Finally, the five safeguards that I have highlighted will be powerful measures to ensure that what she describes will not happen.
For those reasons, I would be grateful if my hon. Friend the Member for St Ives did not press his new clause to a vote. I would also hope that, on reflection and having made her points, the hon. Member for Islington South and Finsbury will resist the temptation to press her amendment to a Division. I fear, however, that she is not going to heed my advice, and she will regret it.